Posted: September 19th, 2022

This is a very important element, especially in today’s technological world where the amount of intellectual property is steadily increasing.

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Please respond to the post below. Agree or disagree. Minimum 100 words.
I chose the World Trade Organization (WTO) because, despite having heard about it a little bit before, I really only have a surface-level knowledge of this organization. However, having the WTO appear in my research a few times over the past couple of weeks for this course has increased my desire to learn more about it. Therefore, when I read about it in this week’s chapters, I became curious to go beyond a surface-level knowledge of how the WTO operates, and the effect that they have on international trade. In addition to that general interest, I sometimes work with suppliers for various capital projects in my job. While some of those companies have strictly American-made products, some shop at least part of their goods from outside the US. Given this, it can only help me to know more about the WTO’s role in world imports and exports; even if that is just to better understand why an order may be delayed for one of those companies due to various current international trading events.
Explanation of the Key Term
Created in 1995, the World Trade Organization “deal with the rules of trade between nations at a global or near-global level.” (Satterlee, 2018, p. 113) Its rules are founded in the General Agreement on Tariffs and Trade (GATT). However, unlike GATT which only deals in trade of physical goods, the WTO deals with trade in intellectual property, and services, in addition to physical goods. This is a very important element, especially in today’s technological world where the amount of intellectual property is steadily increasing. As for operations, the WTO operates by the Golden Rule so as to encourage fair trade. By encouraging fair trade, they discourage things that can be barriers to trade, such as excessive import duties. However, the organization will make exceptions to these excessive duties in order to support developing nations. The WTO’s rules promote increasing trade among current nations, as well as expanding to new nations, which can have a positive effect on the global economy.
Major Article Summary
The article I have chosen to review is ‘Challenges Facing the World Trade Organization: An Overview.’ This article discusses the tensions that the world trade system is under, the challenges the WTO is experiencing due to this, and how the organization needs to reform in order to properly deal with these tensions.
Sampson says that a common theme of these tensions is “discriminatory trade restrictions taken unilaterally, absent of international scrutiny followed by regulatory measures. Unfair practices concerning intellectual property, gaining trade advantages via state-owned enterprises, and dumping are also on the list.” (2018, p. 454) In order to ensure that trade rules stay relevant there have been 8 ‘rounds’ of negotiations conducted under GATT. These rounds have hurt the WTO’s credibility as, in its entire history, the organization has not managed to conclude one single round. A large reason for this is that all WTO members must come to a consensus on all negotiation aspects in order to close a round. Getting 164 people to agree on something, especially when they represent different nations in different levels of “economic development, political systems, and negotiating priorities,” (Sampson, 2018, p. 460) can be difficult, if not impossible. It is for this reason that some of these discussions are taken outside of the WTO.
There are multiple suggestions of how to reform the WTO to make it stronger. Some, such as President Macron of France, believe that a complete overhaul of international competition regulations is required to reform the WTO and prevent a trade war. Sampson however, believes that a lot of the WTO still works well and that a complete reform could lose those pieces, so the only way the WTO can be reformed is through member governments. Essentially, Sampson believes that the WTO can only fix itself.
Discussion
The above-cited work relates to my above explanation in that it shows how the World Trade Organization’s Golden Rule policy is not always effective, and how the organization’s fair-trade rules are good, but when one member country accuses another of unfair trade policies, it can be difficult to resolve this issue due to the WTO’s lacking any actual power of its own. The organization’s rules are a guideline for member countries to follow to try to maintain fair trade, but when a dispute happens, the first method of settlement is a consultation among disputing nations. If that fails, it can go to a panel to see if the member whom the complaint was filed against, violated WTO laws. If that member is found at fault, they can pay a fine and adjust their unfair trading laws. The WTO is a good organization that promotes increased trade, it just needs to improve its rules and methods of dealing with disputes among members.
The cited work relates to the other articles I researched by discussing the way that the WTO’s rules and ways of dealing with member disputes are increasingly ineffective and need to be updated for today’s ever-expanding technological world. Fukunaga, regarding the trade conflict between the USA and China, states that “the WTO has failed not only to adopt rules that address the unfair trade practices of China but also modernize its rules to keep pace with the developments in advanced technology.” (2019, p. 115) The WTO has good rules, and they were effective at its inception in 1995, however, the world has become much more technologically driven over the last 27 years, and the WTO’s lack of keeping up with that has weakened its influence. Another issue which both the cited work discusses, as well as the other articles is that “the weak performance of the WTO is due in part to its work practices, notably (i) consensus-based decision-making…” (Hoekman, 2019, p. 105). As stated above, trying to get 164 members from very different countries, with different levels of economic development and political structures to agree on one topic can be a nearly impossible task. However, “an effective dispute settlement mechanism is critical for existing WTO agreements to remain meaningful, and for the negotiation of new agreements,” (Hoekman & Mavroidis, 2021, p. 6) so reforming the parts of the WTO that no longer work, while keeping the parts that do work is crucial for the future of this organization.
References
Hoekman, B. (2019). Trade Wars and the World Trade Organization: Causes, Consequences, and Change. Asian Economic Policy Review. 15(1). 98-114. Doi: Trade Wars and the World Trade Organization: Causes, Consequences, and Change – Hoekman – 2020 – Asian Economic Policy Review – Wiley Online Library (liberty.edu)
Hoekman, B. & Mavroidis, P. C. (2021). WTO Reform: Back to the Past to Build for the Future. Global Policy. 12(S3). 5-12. Doi: WTO Reform: Back to the Past to Build for the Future – Hoekman – 2021 – Global Policy – Wiley Online Library (liberty.edu)
Fukunaga, Y. (2019). Comment on “Trade Wars and the World Trade Organization: Causes, Consequences, and Change.” Asian Economic Policy Review. 15(1). 115-116. Doi: Comment on “Trade Wars and the World Trade Organization: Causes, Consequences and Change” – Fukunaga – 2020 – Asian Economic Policy Review – Wiley Online Library (liberty.edu)
Sampson, G.P. (2018). Challenges Facing the World Trade Organization: An Overview. The Australian Economic Review. 51(4). 453-473. Doi: Challenges Facing the World Trade Organization: An Overview – Sampson – 2018 – Australian Economic Review – Wiley Online Library (liberty.edu)
Satterlee, B. C. (2018). International Business: with Biblical Worldview. Brian C. Satterlee.

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